Professional · Pinole, CA · Member since 2014 · 17 posts · 5 votes
I have been sitting on the fence for quite a while about getting hard money to start the first investing. I keep hearing it's good way to star. My problem I'm so scared since they charge higher interest and points, and I don't know how it would work in order get any profits at the end?have someone had done successfully any investment using hardmoney lenders and want to shear the experience.
The best thing you can do is always work out the deal in a spreadsheet like excel. You can factor in the cost of the Hard Money loan vs Cash vs Conventional Financing. The numbers don't lie, and they will show you what the best option is.
The best thing you can do is always work out the deal in a spreadsheet like excel. You can factor in the cost of the Hard Money loan vs Cash vs Conventional Financing. The numbers don't lie, and they will show you what the best option is.
With our family we had been doing it passively. We lend money through an agent/church friend who supposedly know what she's doing. We were involved in two cases, one just terminated past december and one still on going. Both were suppose to end a year ago, yet they were overdue by now. Both promised 10% ROI in annual term. When I went back to review the number for the one that closed in december, the return was no where near 10%.
I totally agree with Ryan to crunch your hypothetical numbers first and know what to expect before jumping into hard money business without doing any study, whether you are doing to borrow hard money or be the lending side.
I am I am going to stay away from HM for now and do more due diligence before coming back to it....